Cytokines are secreted proteins that regulate cell growth and differentiation. These factors are especially important in regulating immune and inflammatory responses, regulating lymphoid development and differentiation. Cytokines also regulate immune homeostasis, tolerance, and memory. Not surprisingly, cytokines are critical in the pathogenesis of autoimmune diseases such as rheumatoid arthritis, systemic lupus erythematosus, inflammatory bowel disease and psoriasis. Understanding the molecular basis of cytokine action provides important insights into the pathogenesis of immune-mediated disease and offers new therapeutic targets.[unreadable] Cytokine receptors are associated with Janus family kinases (Jaks), which initiate signaling (see project AR041106-14). Following activation of Jaks, the next step in signaling is the activation of a family of transcription factors called Stats (signal transducers and activators of transcription) (see project AR041159-01). [unreadable] To better understand the molecular actions of cytokines, we performed transcriptional profiling of mouse and human T cells activated by interleukin (IL)-12. We identified a large number of inducible genes, some of which had been previously recognized as being IL-12-inducible. One gene not previously recognized to be highly regulated by cytokines was the gene encoding the proprotein converstase, furin. We found through the use of Stat4-deficient mice that the induction of furin was dependent upon this transcription factor. In addition, using chromatin immunoprecipitation, we defined furin and as a direct Stat4 target. [unreadable] We generated mice that lack furin in T cells using Cre-lox strategy and found that these mice develop autoimmune inflammatory bowel disease characterized by gastritis, ileitis and colitis. The mice also produce anti-nuclear antibodies, a characteristic feature of systemic lupus erythematosus. The T cells in these mice overproduce cytokines, especially Th2 cytokines. TGF-beta is a known target of furin and the mice have impaired production of TGF-beta. Thus these mice represent a new model of autoimmune disease and illustrate the essential function of furin in T cells. Furthermore, furin-deficient T regulatory (T(reg)) cells were less protective in a T-cell transfer colitis model and failed to induce Foxp3 in normal T cells. Additionally, furin-deficient effector cells were inherently over-active and were resistant to suppressive activity of wild-type T(reg) cells, both in vitro and in vivo in the model of inflammatory bowel disease. Thus, our results indicate that furin is indispensable in maintaining peripheral tolerance, which is due, at least in part, to its non-redundant, essential function in regulating TGF-beta1 production. Targeting furin has emerged as a strategy in malignant and infectious disease. Our results suggest that inhibiting furin might activate immune responses, but may result in a breakdown in peripheral tolerance.